TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Sunday, October 25, 2015

The IRS Scandal, Day 899

IRS Logo 2Investor's Business Daily editorial, IRS' Lois Lerner Skates; An Ugly Precedent Is Set:

The Justice Department declined to file charges against IRS enforcer Lois Lerner, who singled out Tea Party groups for scrutiny on political grounds. With no accountability, it's now open season on dissidents. ...

That's the message the Justice Department sent when, in a classic Friday night news dump, it decided to not file charges against IRS tax-exempt groups chief Lois Lerner. In a letter to the House Judiciary Committee, Justice said that while it found "mismanagement, poor judgment and inertia," there was no case for a criminal prosecution.

This is absurd. Lerner was caught red-handed targeting Tea Party and other conservative groups, wrote partisan emails to prove it, then engaged in a massive cover-up effort — with a suspiciously crashed server, an oddly missing BlackBerry and plenty of excuses.

She evaded even more accountability by shielding herself with the Fifth Amendment in Congress. The consequences to her have been . .. retirement on a full pension with all her bonuses to a multimillion-dollar mansion in the deep D.C. suburbs.

As for her victims — and they were many — there is no justice. Now everyone, no matter what their political leanings, will wonder if they too are a political target by an out-of-control agency protected by the Justice Department.

Because that's the real consequence of this failure to hold Lerner accountable: A precedent has been set.

IRS officials now know they can go after any political opponent they want, ruin them any way they wish, swing an election — as occurred with Lerner's actions — and get away with it. ...

The Democrats may giggle with glee at seeing another of their own skate free based on the president's executive actions through his DOJ flunkies.

But two can play that game. If a Republican as unscrupulous as Obama wins the election, the same banana republic politics in government will make Democrats the next victims.

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October 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, October 24, 2015

The IRS Scandal, Day 898

IRS Logo 2Wall Street Journal, Obama’s Lobbying of the FBI Flouts the Law: President Obama Is Signaling to Any Willing Listener in the FBI What Action He Wants the FBI to Take:

President Obama’s recent comments in his “60 Minutes” interview about the Hillary Clinton email scandal remind me of his 2010-11 comments about right-wing PACs, which led Lois Lerner to deny fair and equal treatment to conservative PACs. Just by making the comment, President Obama is signaling to any willing listener in the FBI what action he wants the FBI to take. Let’s hope that there is no “Lois Lerner” figure in a position to follow the president’s instructions, and instead that the FBI will proceed in accordance with independent efforts to fulfill its legitimate duties and not subvert those duties to a desired political outcome.

Letter From Peter J. Kadzik (Assistant Attorney General) to Bob Goodlatte (Chair, House Judiciary Committee) and John Conyers, Jr. (Ranking Member, House Judiciary Committee), Oct. 23, 2015:

We write to inform you about the Department of Justice's criminal investigation into whether any IRS officials committed crimes in connection with the handling of tax-exemption applications filed by Tea Party and ideologically similar organizations. Consistent with statements from the Department of Justice (the Department) throughout the investigation, we are pleased to provide additional information regarding this matter now that we have concluded our investigation. In recognition of not only our commitment to provide such information in this case, but also the Committee's interest in this particular matter, we now provide a short summary of our investigative findings.

In collaboration with the FBI and Treasury Inspector General for Tax Administration (TIGTA), the Department's Criminal and Civil Rights Divisions conducted an exhaustive probe. We conducted more than 100 witness interviews, collected more than one million pages of IRS documents, analyzed almost 500 tax-exemption applications, examined the role and potential culpability of scores of IRS employees, and considered the applicability of civil rights, tax administration, and obstruction statutes.  Our investigation uncovered substantial evidence of mismanagement, poor judgment, and institutional inertia, leading to the belief by many tax­ exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime. We found no evidence that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives that would support a criminal prosecution. We also found no evidence that any official involved in the handling of tax-exempt applications or IRS leadership attempted to obstruct justice.  Based on the evidence developed in this investigation and the recommendation of experienced career prosecutors and supervising attorneys at the Department, we are closing our investigation and will not seek any criminal charges.

Throughout the investigation, not a single IRS employee reported any allegation, concern, or suspicion that the handling of tax-exempt applications-or any other IRS function­ was motivated by political bias, discriminatory intent, or corruption. Among these witnesses were several IRS employees who were critical of Ms. Lerner’s and other officials’ leadership, as well as others who volunteered to us that they are politically conservative. Moreover, both TIGTA and the IRS’s Whistleblower Office confirmed that neither has received internal complaints from IRS employees alleging that officials’ handling of tax-exempt applications was motivated by political or other discriminatory bias. ...

The Department searched exhaustively for evidence that any IRS employee deliberately targeted an applicant or group of applicants for scrutiny, delay, denial, or other adverse treatment because of their viewpoint. Intentional viewpoint discrimination may violate civil rights statutes, which criminalize acting under color of law to willfully deprive a person of rights protected by the Constitution or federal law. See 18 U.S.C. §§ 241, 242. Intentional viewpoint discrimination may also violate criminal tax statutes that prohibit IRS employees from committing willful oppression under color of law, for example by deliberately failing to perform official duties with the intent of defeating the due administration of revenue laws, or by corruptly impeding or obstructing the administration of the Tax Code. See 26 U.S.C. §§ 7214(a)(l ), 7214(a)(3), 7212(a). These statutes require proof beyond a reasonable doubt that an IRS official specifically intended to violate the Constitution, Tax Code, or another federal law.

As applied to this case, a criminal prosecution under any of these statutes would require proof that an IRS official intentionally discriminated against an applicant based upon viewpoint. It would be insufficient to prove only that IRS employees used inappropriate criteria to coordinate the review of applications, acted in ways that resulted in the delay of the processing applications, or disproportionately subjected some applicants to burdensome or unnecessary questions. Instead, we would have to prove that such actions were undertaken for the very purpose of harassing or harming applicants. Proof that an IRS employee acted in good faith would be a complete defense to a criminal charge; and proof that an IRS employee acted because of mistake, bad judgment, ignorance, inertia, or even negligence would be insufficient to support a criminal charge.

Our investigation found no evidence that any IRS employee acted with criminal intent. We analyzed the culpability of every IRS employee who played a role in coordinating for review applications or handling them afterwards, from line-level revenue agents and managers in the Cincinnati-based Determinations Unit, to tax law specialists and senior executive officials based in Washington, D.C. Apart from the belief by many tax-exempt applicants affiliated with the Tea Party and similar ideologies that they had been targeted, we found no evidence that any IRS employee intentionally discriminated against these groups based upon their viewpoints. To the contrary, the evidence indicates that the decisions made by IRS employees, though misdirected, were motivated by the desire to treat similar applications consistently and avoid making incorrect decisions. Their plans to treat applications consistently were poorly implemented, due to a combination of ignorance about how to apply section 501(c)(4)'s requirements to organizations engaged in political activity, lack of guidance from subject matter experts about how to make decisions in an area most witnesses described as difficult, and repeated communication and management issues. Moreover, many employees failed to engage in critical thought about the effect their actions (or inactions) would have upon those who applied for tax-exempt status. We found that many IRS employees' failure to give adequate attention to the applications at issue was caused by competing demands on their time and an unwillingness to be held accountable for difficult decisions over sensitive matters. We did not, however, uncover any evidence that any of these employees were motivated by intentional viewpoint discrimination.

The IRS mishandled the processing of tax-exempt applications in a manner that disproportionately impacted applicants affiliated with the Tea Party and similar groups, leaving the appearance that the IRS' s conduct was motivated by political, discriminatory, corrupt, or other inappropriate motive.  However, ineffective management is not a crime.  The Department of Justice's exhaustive probe revealed no evidence that would support a criminal prosecution. What occurred is disquieting and may necessitate corrective action - but it does not warrant criminal prosecution.

We hope this information is helpful. We have made a substantial  effort  to  provide detailed information regarding our findings in this letter, and would be pleased to offer a briefing to address any questions you may have on this matter. Please do not hesitate to contact this office if we may provide additional assistance regarding this or any other matter.

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October 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, October 23, 2015

The IRS Scandal, Day 897

IRS Logo 2Daily Kos, Karl Rove's Newest 'Social Welfare' Group Spending Millions to Keep the Senate in Republican Hands:

If you're a regular Digest reader, you've seen reference recently to a new conservative group called One Nation that's been spending money to run ads on behalf of vulnerable Republican senators. The organization is not a super PAC but a 501(c)(4), a type of non-profit that is supposed to promote "social welfare" causes and cannot primarily engage in political activity. Unlike super PACs, these non-profits don't have to disclose their donors, and of course, the rules on limiting political activity are regularly flouted.

There had been talk in recent years about clamping down on these abuses, but after Republicans in Congress successfully mau-maued the IRS with trumped-up charges that the agency had unfairly targeted tea party groups, those enforcement efforts have collapsed. (One grotesque example: A North Carolina "social welfare" outfit called Carolina Rising spent 97 percent of its $5 million budget on ads to help Republican Thom Tillis defeat Democratic Sen. Kay Hagan last year.)

(Hat Tip: Ted Seto.)

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October 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Thursday, October 22, 2015

IRS Releases 2016 Inflation Adjustments

IRS Logo 2The IRS has released various inflation-adjustments for 2016 (IR-2015-118IR-2015-119,  & Rev. Proc. 2015-53), including:

  • Gift Tax Exemption:  $14,000 (same as 2015)
  • Unified Credit:  $5,450,000 (up $20,000 from 2015)
  • Top 39.6% Income Tax Rate:  $415,050 single/$466,950 joint (up $1,850/$2,100 from 2015)
  • Standard Deduction:  $6,300 single/$12,600 joint (same as 2015)
  • Personal Exemption:  $4,050 (up $50 from 2015)

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October 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Treasury Department Issues Proposed Regs Implementing Obergefell And Windsor On Same-Sex Marriage

IRS Logo 2U.S. Treasury Department, Treasury Announces Proposed Regulations Implementing the Supreme Court’s Same-Sex Marriage Decision for Federal Tax Purposes:

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today announced proposed regulations providing that a marriage of two individuals, whether of the same sex or the opposite sex, will be recognized for federal tax purposes if that marriage is recognized by any state, possession, or territory of the United States.  The proposed regulations would also interpret the terms “husband” and “wife” to include same-sex spouses as well as opposite-sex spouses.  These regulations implement the Supreme Court’s decision in Obergefell v. Hodges.

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October 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

The IRS Scandal, Day 896

IRS Logo 2Washington Times, The Leader of the Free World Is Corrupt:

Mr. Obama tried to influence the outcome of an active FBI investigation while on national television. He telegraphed that of course his Department of Justice would not pursue charges against Mrs. Clinton, no matter what the FBI found and what opinion they put forth. Obviously, this is not the first time. We all remember his comments that there was not a smidgen of corruption in the IRS as the agency destroyed evidence, obstructed justice, lied, withheld information from Congress, and did anything to prevent the truth about this administration’s actively targeting the conservative political opposition with federal power during the last election.

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October 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, October 21, 2015

The IRS Scandal, Day 895

IRS Logo 2Breitbart, Judge Jeanine to Obama: Is the FBI’s Hillary Email Investigation ‘Nothing More Than a Charade?’:

Judge Jeanine Pirro opened her Fox News Channel show “Justice” Saturday with a monologue ripping Democratic presidential candidate Hillary Clinton and President Barack Obama for the Benghazi investigation, including Obama’s standing up for Clinton and her server for saying he did not think it posed a national security issue.

“Our national security not endangered?” she said. “There you go again, Mr. President. Like not a smidgen of corruption in the IRS and then Ferguson and Trayvon Martin and law enforcement. Mr. President, you pre-judge situations before knowing the facts. Why did you appoint Jim Comey if you weren’t going to let him do the job at the FBI? You undercut the investigation. Were you signaling that you’re not going to let the Justice Department bring charges, even if the FBI puts together a case? Is this investigation nothing more than a charade?”

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October 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, October 20, 2015

The IRS Scandal, Day 894

IRS Logo 2Wall Street Journal, Mrs. Clinton Gets a Pass:

PauL Gigot:  Kim, what did you make of President Obama’s comments about the email scandal, saying there was no intent, no national security problem, No. 1; No. 2, there was no intent to violate federal law. Was that a signal to the FBI?

Kimberly Strassel:  It was an enormous signal to the FBI, saying back off, don’t go after the woman who was likely to be our nominee.

By the way, Paul, this is a habit of the president. Think about it. He did the same thing back when the FBI was supposedly investigating and is still supposedly investigating the IRS scandal. It only took a few months after the revelations about the targeting that happened that he came out and was dismissing it. Within a few months of that, he had declared there was not a, quote, “smidgen of corruption.” Now, there is no way for him to know, just as we assume there’s no way he knows about what has actually happened with Hillary’s server. This isn’t him giving information. This is him giving orders.

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October 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, October 19, 2015

The IRS Scandal, Day 893

IRS Logo 2Bloomberg View:  House Republicans' Latest Bad Idea: Impeaching the IRS Chief, by Albert R. Hunt:

If the House Republicans' Benghazi investigation craters after former Secretary of State Hillary Clinton's testimony this week, the chamber's right-wing caucus has a sequel in mind: attempting the second impeachment of an executive branch appointee in 226 years.

The target is Internal Revenue Service Commissioner John Koskinen. The specifics of any supposed impeachable offenses are vague. Koskinen, 76, is a respected, successful business and government executive who, at the behest of the White House, took on the job of cleaning up the beleaguered tax agency in December 2013, after offenses had been committed.

Since 1789, the House has impeached 19 officials: two presidents, 15 judges, a senator in the 18th century. The only executive branch appointee was William Belknap, President Ulysses S. Grant's war secretary.

Now, the 40-member Freedom Caucus, which played a role in Speaker John Boehner's resignation, wants to try again. The House Oversight Committee, where proceedings would start, is stacked with right-wing Republicans.

The accusations stem from 2013, when the IRS's tax-exempt division was found to have disproportionately targeted conservative groups for scrutiny. Although Koskinen was brought in after the damage had been done, Ohio Representative Jim Jordan and his Freedom Caucus followers say he has tried to cover up some wrongdoing. Some, rather recklessly, accuse him of lying. The tax agency is unpopular and makes an appealing political target.

Democrats say the allegations against Koskinen are unfounded: "It is despicable character assassination," said Representative Gerald Connolly, a Virginia Democrat who serves on the Oversight Committee. "They are manufacturing a phony issue for ideological reasons."

The case has problems. The specific charges seem specious: There may have been miscommunication, but there is no evidence of wrongdoing by Koskinen. ...

A partisan impeachment probably would seem a foolish distraction from the real issues of jobs, health care, debt and terrorism. It could backfire in the same way as the impeachment of President Bill Clinton 17 years ago, the politically motivated government shutdowns and the fizzling Benghazi inquest is likely to.

The fight within the House Republican caucus reflects less an ideological split than the manifestation of an apocalyptic view from the right-wing minority that the political system has to be destroyed before it can be reformed. That justifies actions such as impeachment.

More than a few Republicans fear their colleagues would be making a huge mistake.

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October 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (7)

Sunday, October 18, 2015

The IRS Scandal, Day 892

IRS Logo 2Media Tracker, GAB Official’s Relationship with IRS’s Lerner Spanned Personal to Professional:

E-mails obtained by a Republican lawmaker and a conservative organization, along with travel records and expense reports portray a wide-ranging relationship between Wisconsin’s controversial top elections official and the disgraced former head of the federal Internal Revenue Service’s tax-exempt division. The relationship between Kevin Kennedy, head of the Government Accountability Board, and Lois Lerner, the Obama Administration IRS official who used her perch to harass and threaten conservative non-profit groups, was first revealed by the Wall Street Journal and further explained by the MacIver Institute.

But the entire story found in the numerous e-mails – and verified by state travel records – has never been fully told.

Kennedy has been extremely defensive about his interaction with Lerner, accusing a state senator of being like U.S. Sen. Joe McCarthy, the Wisconsin senator who fear-mongered about communists in government in the 1950s, when that senator asked Kennedy this week about the nature of the relationship.

State Rep. Dave Craig, a Republican who is leading the fight to reform Wisconsin’s John Doe investigation process, first obtained e-mails between Kennedy and Lerner in an open records request. Under Kennedy’s leadership, the GAB worked in tandem with the Milwaukee County District Attorney’s office to use the state’s current John Doe law to harass, investigate and bully conservatives. The e-mails were also obtained by True the Vote, a conservative Texas-based election watchdog that was targeted by Lerner and the IRS. True the Vote also obtained several years’ worth of Kennedy’s travel schedules.

The e-mails show that Kennedy and Lerner, in addition to sending each other a few e-mails about professional work, would share travel details – including hotel addresses – with each other and circulate random photographs and generic poems with a tight circle of acquaintances. ...

Although Kennedy may think his relationship with Lerner is off-limits to questioning, simply dismissing it as McCarthyism doesn’t explain why Wisconsin’s top elections official would work so closely with an IRS official who had to leave her job in the Obama Administration because of her targeting of conservative organizations. Kennedy’s own work targeting conservatives may offer more insight than his manufactured outrage in front of a legislative committee.

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October 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, October 17, 2015

The IRS Scandal, Day 891

IRS Logo 2Washington Post op-ed:  Democrats Protect Each Other Better Than Republicans Do, by Ed Rogers:

The fix is in. No less then the leader of the Democratic Party — that is, the current president of the United States of America — has declared that the matter of Hillary Clinton’s home-brew server and e-mail escapades is political in nature and of no harm to national security. That is remarkable, given that any honest outside observer would not draw the same conclusion and that even many of the usual suspects in the media have been tempered in their efforts to vindicate Hillary Clinton. ‎Not to mention, just as President Obama essentially gave Clinton a get-out-of-jail-free card, it turns out that the FBI is actually expanding the scope of its probe to include possible violations of an Espionage Act provision that refers to gross negligence in handling classified information — a violation that could be punishable by up to 10 years in prison.

While the president’s definitive declaration on “60 Minutes” that he didn’t think Hillary Clinton’s e-mail situation “posed a national security problem” reportedly “angered FBI agents” working the case, it’s not like the president hasn’t done this before. Remember his assertion that there was “not even a smidgen of corruption” regarding the IRS targeting scandal? Well, that scandal is also still being investigated — but conveniently for the president, the person in charge of that investigation is a partisan Democratic donor, Justice Department lawyer Barbara Bosserman. ‎I guess as long as the president’s former employee Lois Lerner continues to take the Fifth and Barbara Bosserman continues to be in the lead, the smidgens will stay locked out of sight. If the FBI didn’t get the message yesterday with the president’s direct order that the conclusion on Hillary’s e-mails should be that it “is not a situation in which America’s national security was endangered” and they get too close to the truth, maybe the White House will put Bosserman in charge of the e-mail investigation as well, just to make sure everything comes out the way the president wants it to.

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October 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, October 16, 2015

The IRS Scandal, Day 890

IRS Logo 2Breitbart, Ben Carson’s Book Tour Threatens to End Civilization As We Know It:

Ben Carson is going to suspend his presidential campaign for two weeks to hawk his book! This is unprecedented! It shows he’s not serious about running for president! It proves he doesn’t understand anything about how politics works! It’s the end of the world as we know it, and nobody feels fine!

“Sen. John McCain suspended his presidential campaign for a financial crisis. Famed neurosurgeon Ben Carson is doing so for a book tour,” gasped the Huffington Post. The notion that Carson was “suspending” his campaign appeared in headlines and news stories across the Internet. ...

In the ABC report, Carson spokesman Doug Watts explained that leaving the campaign staff behind while Carson spends a few days focusing on his book tour alleviates concerns about “co-mingling from the corporate standpoint to the Federal Election Commission standpoint so it’s just better to avoid any bad appearance.”

Does anyone, post-IRS scandal, think it’s a bad idea for Republican candidates to be extra-careful about attracting the interest of Obama Administration regulatory agencies? Does everyone remember which agency IRS scandal kingpin Lois Lerner worked for, before she signed up with Internal Revenue?

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October 16, 2015 in IRS News, IRS Scandal, Political News, Tax | Permalink | Comments (1)

Thursday, October 15, 2015

TIGTA: 1,300 IRS Computers, 50% Of IRS Servers Are Running Outdated Operating Systems, Putting Taxpayer Data At Risk

Windows FinalSlate, IRS Hasn’t Finished Doing Windows Upgrades Because It Can’t Find a Bunch of Its Computers:

It's hard to muster the strength to talk about Windows XP anymore. In March 2014 it still held 30 percent of operating system marketshare, and now it's down to 12 percent, which shows improvement but is still not zero. Don't forget, XP is 14 years old. Organizations have encountered challenges as they work to eliminate XP from their networks, and (suprising no one) a recent audit shows that the Internal Revenue Service is struggling.

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October 15, 2015 in IRS News, Tax | Permalink | Comments (3)

The IRS Scandal, Day 889

IRS Logo 2Canada Free Press op-ed:  Priorities: Why Obama Coddles Iran But Sicks the IRS on You, by Herman Cain:

If you want to know someone’s priorities, pay attention to when they’re meticulous – and to when they act like they just can’t be bothered to put in half an effort.

Take, for example, the Obama Administration. The Wall Street Journal reported last week that nuclear inspectors acting under the nuclear deal President Obama and John Kerry negotiated with the ayatollahs have pronounced themselves pleased with self-inspected soil samples submitted by Iran from its Parchin nuclear facility. The idea of a terrorist-supporting regime being allowed to gather and send in its own soil samples has been compared to letting Alex Rodriguez send the commissioner’s office his urine sample via FedEx. Anyone who is serious about preventing a rogue regime from getting nuclear weapons would instantly recognize how insane this is.

So why didn’t the Obama Administration hold out for a more rigid inspection process? Are they too dumb? No. They didn’t insist on real inspections because it’s just not that important to them. What they cared about was getting a deal done – and if the deal wasn’t in the best interests of the U.S. or the cause of global security, they didn’t care.

And I’m confident of this because I see what they do when something is important to them. Consider their approach to tax-exemption applications from conservative nonprofit groups. Does the IRS simply ask these groups to send in an affirmation that what they’re doing is legal and consistent with the law governing nonprofit tax exemptions? Of course not. The IRS often drags out the process for months or even years, in some cases even demanding that these groups disclose their donor lists and who they’ve recently had as speakers. ...

If Obama viewed conservatives the same way he views Iran, he would instruct the IRS to let us self-submit our own audits, and then just smile and thank us for our trouble. If he viewed oil companies the way he views Cuba, he would not only let them build pipelines, he would ask them what else they need for their trouble.

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October 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, October 14, 2015

Product Placement At Law Firms

MBAmerican Lawyer,  Amid IRS Case, Microsoft Touts Bartlit Beck in Surface Ad

Talk about product placement.

When Microsoft Corp. wanted to show off its Surface tablet computer in a new online marketing campaign, the company looked no further than one of its own outside lawyers. It chose Chicago-based litigator Brian Prestes, a young Bartlit Beck Herman Palenchar & Scott partner who just happens to be trial counsel for Microsoft in a bitter standoff with the Internal Revenue Service over a multibillion-dollar tax audit.

Microsoft unveiled the result on Oct. 2: A two-and-a-half-minute, sleekly produced advertisement that features Prestes as he travels around Chicago between his home and Bartlit Beck’s downtown offices. His real-life wife and daughters co-star in the video, as does his German shepherd.  

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October 14, 2015 in IRS News, Legal Education, Tax | Permalink | Comments (1)

The IRS Scandal, Day 888

IRS Logo, GAO: IRS Still Lacks Safeguards to Prevent Political Targeting:

In the wake of revelations Internal Revenue Service (IRS) agents unfairly targeted certain non-profit organizations for enhanced compliance scrutiny, the U.S. Government Accountability Office (GAO) has released a new report detailing IRS’ failure to enact safeguards preventing future instances of unequal scrutiny.

Beginning in 2010, employees of IRS’ Exempt Organizations division, under the supervision of division Director Lois Lerner, violated IRS policies by singling out organizations for special examination based on a group’s name or policy positions with the aim of slowing or preventing the ability of conservative organizations to receive tax-exempt donations in the run-up to the 2012 elections.

Despite prior GAO documentation of IRS internal policy violations, IRS policies still do little to prevent unfairness in the agency’s operations.

Rep. Peter Roskam (R-IL), chairman of the U.S. House Ways and Means Subcommittee on Oversight, says lawmakers must continue to pressure IRS to change its ways.

“It’s an old IRS ploy where they come in and say, ‘We agree with the findings, and we agree to make these changes,’ but then they never […] make the changes,” Roskam said. “So, we are going to continue to do the oversight necessary to keep this in the minds of the American public, and to make sure the IRS knows we are watching them.”

Roskam says Lerner, who resigned with a full federal pension after refusing to testify before Congress about her division’s actions, may yet be prosecuted for her role in the scandal. ...

Bruce Yandle, dean emeritus of Clemson University’s College of Business and Behavioral Science, says public choice theory explains IRS’ failure to correct its policies. “Basically, public choice theory states that elements of political behavior are predictable when viewed through the lens of economics,” Yandle said. “The old adage ‘Keep your eye on the money—where it comes from, and where it goes,’ will help you understand the different actions that take place politically.” ...

Weaponized Enforcement.  Yandle says government agencies can be expected to protect those it perceives as a friend and attack those it considers to be an enemy. ... In 1999, a study was done on political influences in the IRS by examining rates at which the IRS engages in audits. Examining the data during the [President Bill] Clinton period, the investigators found, systematically, that the IRS frequently had audits in those places where people did not behave well toward Bill Clinton.”

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October 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, October 13, 2015

The IRS Scandal, Day 887

IRS Logo 2Washington Post:  ‘Dark Money’ is the IRS’s Real Problem, by Henry Geller:

n his Oct. 8 op-ed column, Impeach the IRS director, George F. Will criticized the Internal Revenue Service for its delay in processing applications for tax-exempt status and indeed urged that the IRS director be impeached.

However, these social welfare organizations under 501(c)(4) were never meant to be entities engaged only in political activities, so the IRS has sought to define how much political activity they can engage in. The IRS has been unsuccessful in this effort, and it is difficult to see how it can hope to succeed.

The result has been the emergence of entities such as Crossroads GPS and Americans for Prosperity on the Republican side, and Priorities USA and Organizing for Action on the Democratic side. Because IRS rules do not require disclosure of donors, the electorate has no notion of who is trying to sway their votes, contrary to the recent Supreme Court opinions in Citizens United and McCutcheon strongly urging transparency. This flood of “dark money” in the most recent election and the next one is the real mess at the IRS.

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October 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Monday, October 12, 2015

The IRS Scandal, Day 886

IRS Logo 2Forbes:  IRS Scandal Narrative Still Inspires Passion, by Peter J. Reilly:

As something of an amateur historian, my biggest question about the IRS Scandal, which I sometimes refer to as Teapartygate, is how prominent it will be in our historical memory in a few decades. There are certain controversies about particular incidents that become vehicles for ideological freight and achieve a long life at least among the culturally literate. Think of the Dreyfus affair (l’affaire Dreyfus) or the trial of Sacco and Vanzetti . The IRS Scandal certainly has an ideological dimension as it can be portrayed as Washington insiders using the most feared federal agency to intimidate people advocating a return to constitutional values. ...

If there is one place where it is clear that the IRS Scandal is still a thing, it is in Paul Caron’s series which I call the day by day IRS Scandal as since May 13, 2013, the title to the posts have been in the form of The IRS, Scandal  Day X (May 13 was Day 5). The initial post (presumably Day 1) was titled IRS Admits Targeting Conservative Groups in 2012 Election.

Earlier this week I wrote that Professor Caron’s series may have “jumped the shark”.  Although in my first piece, I suggested that it was time to convert it to an archive, after having gone through the whole series, I concluded that what really needed to happen was to have some days, perhaps quite a few, where the entry is nothing to report. ...

Professor Caron’s response to my critique was very classy. My posts were featured as The IRS Scandal, Day 883.  He also included a polling question “Should I Continue My Daily Posts On The IRS Scandal?”.  The results of the poll are The IRS Scandal, Day 884.  Given where the question was asked, it is not at all surprising that the majority was “Yes”.  Arguably it was overwhelming 792 to 86.  The passion of some of the comments was what I found most interesting. ...

Interestingly, the TaxProf, himself, is not exactly an IRS Scandal true believer. On Day 369, Professor Caron wrote:

Step one should be to give Lois Lerner full immunity from prosecution in exchange for her testimony . And then let the chips fall where they may.

Scandal skeptics take Issa’s refusal to grant Lois Lerner immunity as an indication that his committee was not really interested in finding out the truth.

The other passionate comment that I took note of was by Joe Kristan on his own blog.

 I worry that the administration will succeed in running out the clock on the outrageous IRS misconduct.

Although it appears that Joe and I have similar interests and attitudes and professional experience, I sometimes get hints that he might be just a tad more to the right than I am.  He and I are working on having some sort of IRS Scandal debate, after October 15 (That’s the extended due date for individuals).  Stay tuned.

There have been fairly extensive House and Senate investigations into the core scandal.  The agreed facts that came out of both reports can support narratives of either bureaucratic bumbling or politically biased harassment.  Someone on the left would likely argue that the scandal machine has actually won in that the IRS is neutered, at least for the next election cycle, in enforcing rules that provide some level of transparency in political spending.  On the right, there is still a call for more revelations and somebody being punished.  It looks like you will be able to follow it all on the TaxProf series for the foreseeable future.

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October 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Sunday, October 11, 2015

The IRS Scandal, Day 885

IRS Logo 2John Stossel, Candidates Should be Screaming About Regulations:

I’m upset that the presidential candidates, all of them, rarely mention a huge problem: the quiet cancer that kills opportunity — regulation. The accumulated burden of it is the reason America is stuck in the slowest economic recovery since the Depression.

I understand why candidates don’t talk about it:  Regulation is boring. But it’s important.

The founders of this republic were willing to die rather than be subject to other people’s rules. Today we are so accustomed to bureaucracy that we’ve forgotten what it means to be free.

We now have a million rules — many so complex that even legal specialists can’t understand them. Yet bureaucrats keep writing more. ...

Since we don’t know all the rules, we’re never quite sure if we’re breaking any. Better to keep your head down.

And sometimes the rule-makers really are out to get you. Nixon used the IRS against political enemies. So did Obama IRS appointee Lois Lerner.

It’s time for Americans to fight back. As Gen. Douglas MacArthur said, “You are remembered by the rules you break.”

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October 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Saturday, October 10, 2015

The IRS Scandal, Day 884

Friday, October 9, 2015

The IRS Scandal, Day 883

IRS Logo 2Peter J. Reilly (Forbes), Paul Caron's Day By Day IRS Scandal Has Jumped The Shark - Part 1:

The interminable IRS scandal is now on Day 880 by TaxProf count. The TaxProf is Paul Caron, a law professor at Pepperdine University School of Law and Editor of the TaxProf Blog.  I consider Paul Caron the dean of the tax blogosphere.  His IRS Scandal series is a valuable reference tool if you want to reconstruct the chronology of the scandal, but I think the series may have finally jumped the shark. ... In order to make my case that it might be time for the TaxProf to turn his Scandal Day by Day into an archive, I am reviewing the whole thing and will share some of the high points with you. ... I think if you will spend the hours I just spent you will agree that Paul Caron’s coverage is pretty balanced. ...

Day 369 gives us a piece by Paul Caron, himself – The Media Ignore IRS Scandal – (As someone who took Greek in high school I have to admire the prof for knowing that the word “media” is plural).

Today’s news media are largely ignoring the IRS scandal, and it is impossible to have confidence in the current investigations by the FBI, Justice Department, and House committee. I am not suggesting that the current scandal in the end will rise to the level of Watergate. But the allegations are serious, and fair-minded Americans of both parties should agree that a thorough investigation needs to be undertaken to either debunk them or confirm them.

Step one should be to give Lois Lerner full immunity from prosecution in exchange for her testimony. And then let the chips fall where they may.

I’ve heard it said that Professor Caron’s continued coverage shows a conservative bias, but here he is clearly putting the ball in Issa’s court, a ball which will never be picked up.

Joe Kristan (Tax Update Blog), Tax Roundup, 10/7/15:

Sometimes I think the TaxProf has to reach deep to have something to run every day, but his continued focus on the outrageous IRS behavior is a public service. I’m not sure Peter thinks there is a scandal in the first place.

Peter J. Reilly (Forbes), Paul Caron's Day By Day IRS Scandal Has Jumped The Shark — Conclusion:

I fear that the series which serves as a great resource is in danger of having its quality diluted. ...

As I noted in Part I, I consider Paul Caron the dean of the tax blogosphere, so it seems rather arrogant of me to make suggestions about how he should run his blog, but as it happens, my blogging persona is kind of on the arrogant side. What I would like to see happen with the day by day IRS Scandal is some sort of boundary around what the scandal is which would result in quite a few days where there is nothing to report. We will continue to see flurries of activity for at least the next year or two as various pieces of litigation play out, but there might be more and more days with nothing to report. I think a policy like that would prevent the high quality of the series from being diluted. And of course, if Professor Caron were to do something like Day 900 All Quiet on The IRS Scandal Front, the commenters would be sure to point out anything he missed.

Joe Kristan (Tax Update Blog), Tax Roundup, 10/8/15:

I worry that the administration will succeed in running out the clock on the outrageous IRS misconduct.

Should I Continue My Daily Posts On The IRS Scandal?
Free polls from

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October 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (20)

Thursday, October 8, 2015

The IRS Scandal, Day 882

IRS Logo 2George Will (Washington Post), Impeach the IRS Director:

“Look,” wrote Lois Lerner, echoing Horace Greeley, “my view is that Lincoln was our worst president not our best. He should have let the South go. We really do seem to have 2 totally different mindsets.”

Greeley, editor of the New York Tribune, was referring to Southern secessionist states when he urged President-elect Abraham Lincoln to “let the erring sisters go in peace.”

Greeley favored separating the nation from certain mindsets; Lerner favors suppressing certain mindsets. At the IRS, she participated in delaying for up to five years — effectively denying — tax-exempt status for, and hence restricting political activity by, groups with conservative mindsets. She retired after refusing to testify to congressional committees, invoking Fifth Amendment protection against self-incrimination.

As the IRS cover-up of its and her malfeasance continues, the Republicans’ new House leaders should exercise this constitutional power: “The House … shall have the sole power of impeachment.” The current IRS director, John Koskinen, has earned this attention. ...

Jason Chaffetz, chairman of the Oversight and Government Reform Committee, says the IRS has “lied to Congress” and “destroyed documents under subpoena.” He accuses Koskinen of “lies, obfuscation and deceit”: “He assured us he would comply with a congressional subpoena seeking Lois Lerner’s emails. Not only did he fail to keep that promise, we later learned he did not look in earnest for the information.”

After Koskinen complained about the high cost in time and money involved in the search, employees at a West Virginia data center told a Treasury Department official that no one asked for backup tapes of Lerner’s emails. Subpoenaed documents, including 422 tapes potentially containing 24,000 Lerner emails, were destroyed. For four months, Koskinen kept from Congress information about Lerner’s elusive emails. He testified under oath that he had “confirmed” that none of the tapes could be recovered. ...

Even if, as Koskinen says, he did not intentionally mislead Congress, he did not subsequently do his legal duty to correct the record in a timely manner. Even if he has not committed a crime such as perjury, he has a duty higher than merely avoiding criminality.

If the House votes to impeach, the Senate trial will not produce a two-thirds majority needed for conviction: Democrats are not ingrates. Impeachment would, however, test the mainstream media’s ability to continue ignoring this five-year-old scandal, and would demonstrate to dissatisfied Republican voters that control of Congress can have gratifying consequences.

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October 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, October 7, 2015

The IRS Scandal, Day 881

IRS Logo 2Newsweek op-ed:  America Is in Danger of Being Ruled by the Mob, by Victor Davis Hanson:

The constitution of the Roman Republic was designed as a corrective to democracy. Specifically, it was hoping to protect against the excesses of Athenian-style direct democracy. ...

Americans originally were terrified of what 51 percent of the people in an unchecked democracy might do on any given day—and knew that ancient democracies had always become more, not less, radical and thus more unstable. For all the squabbles between Adams, Jefferson, Hamilton and Madison, they agreed that a republic, not a direct democracy, was a far safer and stable choice of governance.

The result was a potpourri of ways to curb the predictable excesses and fits of the people. An Electoral College reserved commensurate power to rural states rather than passing off the presidential vote into the hands of the huge urban majorities. ...

All consensual governments are prone to scary wild swings of mob-like emotion—and to demagogues who can almost rein in or goad the dêmos. But the Founders sought to make American government immune to Athenian-style craziness through a system of checks and balances that vented popular frenzies without a great deal of damage. ...

In the 21st century, novel developments have increasingly turned us from sober Roman republicans into mercurial Athenian democrats, as we can see especially in this election year. ...

[T]he law is seen as an impediment to such sweeping notions of social justice. It is certainly deemed counter-revolutionary and an impediment to the Obama administration’s idea of an equality of result. As a result, the president at one time or another has ignored enforcement of federal laws, from not prosecuting the rogue behavior of federal bureaucrats at the IRS or EPA to suspending elements of his own Affordable Care Act. ...

What now constitutes actionable criminal behavior in the scandals at the IRS, EPA, ICE and a host of other alphabet agencies are not treated as per se violations of the law. Rather, they are judged according to whether the offender and his crime were deemed progressive and well-intended—or reactionary and thus prosecutable.

CEOs who cannot cap a leaky oil well or who sell noxious peanut products go to jail; EPA functionaries who turn white-water rivers into toxic yellow mush melt back into the coils of the bureaucracy.

Ancient Athens was a wild place—as frenetic, brilliant and dangerous as it proved ultimately unsustainable. Yet we are becoming more like the Athenian mob than the Roman Senate. American law has become negotiable and subject to revolutionary justice, while technology has developed the power to inflame 300 million individuals in a nanosecond.

Without strict adherence to republican government and the protections of the Constitution, the mob will rule—and any American will become subject to its sudden wrath.

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October 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, October 6, 2015

The IRS Scandal, Day 880

IRS Logo 2Ben Carson For President 2016, IRS: Take Away Muslim Group’s Tax-Exempt Status:

The Council on Islamic-American Relations (CAIR), a U.S. Muslim group, recently demanded that I withdraw as candidate for the 2016 presidential race. By doing so, the organization has brazenly violated IRS rules prohibiting tax-exempt nonprofits like CAIR to intervene in a political campaign on behalf of—or in opposition to—a candidate. (Click video link to witness the violation.)

This is not the first time that CAIR has disrespected U.S. laws or America. It has previously lost its tax-exempt status by failing to file federal taxes three years in a row. It had also been named by federal prosecutors as an unindicted co-conspirator in a criminal conspiracy to funnel money to Hamas, a terrorist organization.

The IRS should immediately revoke CAIR’s tax-exempt status. Under the Obama administration, the IRS has systematically targeted conservative nonprofit groups for politically motivated audits and harassment. The agency should now properly do its job and punish the real violators of America’s laws and regulations.

Sign this petition to demand that the IRS revoke CAIR’s nonprofit tax-exempt status.

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October 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, October 5, 2015

The IRS Scandal, Day 879

IRS Logo 2Ricochet, Hearings on Hillary:

Hearings by the Republican majority on recent scandals have been mostly ineffective. In the IRS hearings, three former or current heads of the IRS were key witnesses. Those of us who stayed up with the Lois Lerner epic became familiar with the disdain exhibited by John Koskinen, the current head of the IRS, when he testified.

What the committee seems to do – I am talking about any investigating committee in recent history — is to get the head of the agency or subject under consideration and grill him or her. What happens is that the committee and the public gets the “ignorance of the chief.” The top people don’t know any details. This is true in two senses. If the witness is hostile, and they always are, then they can use ignorance as a delaying tactic. Even if, mirabile dictu, they are willing, they are still lawyers and administrators who deal with paper and people on a very high level. Details are not their forte.

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October 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, October 4, 2015

The IRS Scandal, Day 878

IRS Logo 2Washington Examiner, Jordan: Congress Will Impeach IRS' Koskinen:

This Congress will impeach IRS Commissioner John Koskinen, Rep. Jim Jordan, a member of the House Oversight Committee, told a group of students from the Young America's Foundation Saturday.

"It is something that has to be done," said the Ohio Republican. "If we don't hold some people accountable in the executive branch for the executive overreach we've seen in [the Obama] administration, then they'll never get the message."

Lois Lerner, the central figure at the heart of the IRS' targeting scandal, "did what a lot of people do when they get caught with their hand in the cookie jar; she tried to lie," said Jordan. "She said it wasn't me; it wasn't Washington; it was the folks in Cincinnati" that directed the IRS' illegal targeting of conservative groups.

Lerner said "it was those rogue agents in Cincinnati; a complete lie," he said. Then she took the Fifth Amendment right not to incriminate herself in front of the House Oversight Committee when she was brought in for questioning.

"When you have the central figure lie, and then take the Fifth, it kind of puts a premium on getting the documents, the records, the communications for what went on here," said Jordan.

In the aftermath of the investigation, the IRS issued a preservation order requiring all communications be preserved. But despite all this, in March 2014 the IRS destroyed 422 backup tapes containing as many as 24,000 emails, the Treasury Department inspector general found. ...

The House is going to pursue impeachment because there needs to be consequences for the egregious behavior of the IRS and "we think it's critical to preserving fundamental freedom, fundamental rights," said Jordan.

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October 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, October 3, 2015

TIGTA: IRS Improperly Withheld Information From Taxpayer FOIA Requests 12% Of The Time

TIGTAThe Treasury Inspector General for Tax Administration has released Fiscal Year 2015 Statutory Review of Compliance With the Freedom of Information Act (2015-30-084):

TIGTA is required to conduct periodic audits to determine whether the IRS properly denied written requests for taxpayer information pursuant to FOIA § 552(b)(7) and I.R.C. § 6103. The overall objectives of this audit were to determine whether the IRS improperly withheld information requested by taxpayers in writing, based on FOIA exemption (b)(3), in conjunction with I.R.C. § 6103, and/or FOIA exemption (b)(7) or by replying that responsive records were not available. Specifically, this included determining whether the IRS had adequate and effective policies and procedures to ensure that all of these requests were processed timely and that information was not improperly withheld. In addition, TIGTA determined whether IRS disclosure officers erroneously disclosed sensitive taxpayer information when responding to written FOIA, Privacy Act, or I.R.C. § 6103 information requests.

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October 3, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 877

IRS Logo 2Washington Examiner, IRS Needs a Housecleaning, Not Retention Bonuses:

Earlier this year, IRS Commissioner John Koskinen warned taxpayers that they would suffer delays and poor service from his agency during tax time. In doing so, he cited cuts to the IRS budget.

But as we noted at the time, this was a case of malingering and retaliation, not of real need at the IRS. The IRS had access to $500 million in fees that it could use to deliver needed services, but chose to use the money for a long list of other things.

One of those other things was bonuses for senior executives and nonunion managerial employees — a small line item, to be sure, but a rather incredible one to behold at an agency so publicly beset over widespread power-tripping and misconduct within its bureaucracy.

A few new details of the senior IRS bonus binge have finally come to light, thanks to a Freedom of Information Act request from the Tax Analysts. As the Washington Examiner's Paul Bedard reported Wednesday, the agency paid nearly $2 million in bonuses to these top employees between the time Koskinen took his post in late 2013 (amid the targeting scandal) and January 2015. During that period, 456 managerial employees received bonuses. Over the last five years, 1,269 such employees have gotten bonuses and 351 attorneys have received retention incentives, with a total value of $6 million. ...

In any case, an agency caught in such egregious misconduct as the IRS seems like a strange one to be giving bonuses to top staff. Just this week, the IRS has also been dinged in an inspector general investigation for failing to fulfill lawful FOIA requests properly more than 12 percent of the time. According to the Treasury Inspector General for Tax Administration, the agency failed to give taxpayers the information to which they were entitled in eight out of 65 cases studied.

In the nearly three years since the targeting scandal was revealed, it has become clear that it was just a symptom of a much deeper problem at the IRS — a culture that lacks accountability, rewards failure, and persecutes the innocent. Like the Department of Veterans Affairs, it needs a thorough housecleaning, not retention bonuses.

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October 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, October 2, 2015

The IRS Scandal, Day 876

IRS Logo, Still No Word on GAB Emails to Left-Leaning Groups:

Conservative targets of Wisconsin’s political John Doe investigation were still waiting Wednesday for a judge’s decision on whether the state Government Accountability Board must turn over communications it had with liberal political groups.

Waukesha County Judge Lee Dreyfus Jr. was expected to rule two weeks ago, but the court doesn’t have Microsoft Outlook software, and the judge was unable to view the correspondence in question.

Attorneys for the GAB have since sent the documents in PDF.

Eddie Greim, attorney for conservative activist Eric O’Keefe and the Wisconsin Club for Growth, both plaintiffs in a lawsuit alleging the GAB overstepped its authority in the unconstitutional John Doe probe, tells Wisconsin Watchdog the judge has yet to issue his decision.

On Sept. 15, the plaintiffs asked the judge to compel the accountability board to turn over communications it had with the Brennan Center for Justice and the Campaign Legal Center. ...

CLC claims to represent the public interest in strong enforcement of campaign finance laws. The group has received hundreds of thousands of dollars from Soros-funded organizations. In 2010, the Campaign Legal Center joined other liberal groups asking the IRS to investigate the tax-exempt status of Republican-allied groups. Former IRS official Lois Lerner is accused of leading a campaign to target conservative groups filing as tax-exempt.

In July, the Wall Street Journal reported that GAB director Kevin Kennedy and Lerner were in contact between 2011 and 2013 — when the GAB assisted partisan prosecutors in investigating scores of conservatives and in raiding several of their homes.

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October 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, October 1, 2015

IRS Chief Counsel Blasted For Favorable Ruling On Total Return Swaps

IRS Office of Chief Counsel Logo (2015)Bond Buyer, IRS Chief Counsel Blasted for Favorable Ruling on Total Return Swaps:

Former Internal Revenue Service official Mark Scott is urging the IRS to revoke a private-letter ruling that was favorable for a total return swap, or TRS, arguing that they are "arbitrage schemes" that have "resulted in hundreds of millions of dollars of illegal tax benefits being stolen."

Scott, who spent 18 years at the IRS, was director of the tax-exempt bond office, or TEB, for several years before he left for private practice. He was also an ex-special assistant U.S. attorney for the Justice Department, who made the request in a blisteringly critical letter sent to William J. Wilkins, chief counsel in the IRS Office of Chief Counsel on Sept. 8. In an interview, Scott would not comment on whether he has launched a whistleblower case on TRS', but said this is irrelevant to his concerns about these transactions. ...

Scott's letter to Wilkins refers to the favorable but limited PLR 201502008 that was dated May 21, 2014, but not publicly released by the IRS until Jan. 9 of this year. The ruling did not identify the parties involved but concluded that an extension of a TRS entered into between a borrower and a bank at the same time the underlying tax-exempt bonds were sold "will not be an abusive arbitrage device."

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October 1, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 875

IRS Logo 2Forbes:  More IRS Bonuses Revealed By Lawsuit, by Robert W. Wood:

Many Americans probably think the IRS shouldn’t be handing out bonuses. Not to Lois Lerner or a fired IRS Commissioner anyhow. But they did, and a lawsuit by Tax Analysts tried to get to the bottom of these and other IRS bonuses. Why a lawsuit?

Because the IRS stonewalled, as it not infrequently does. Tax Analysts asked nicely first and made a Freedom of Information Act request. But the IRS has high walls. Eventually, Tax Analysts brought a suit against the IRS to compel the agency to release records of bonuses to high-level executives since 2010.

Many of the bonuses can be traced to IRS Commissioner Koskinen, who took the helm of the IRS in December 2013. Most of the IRS bonuses were paid in February and March 2014, with 238 awards totaling $976,387. No further awards were recorded until November and January 2015, with 218 awards totaling $1,000,108.

In all, the IRS paid 1,269 performance awards and retention incentives to 351 chief counsel executive and nonunion managers. These amounts totaled $5.97 million between January 1, 2010, and February 2, 2015. The average performance award was $4,483. Yet individual awards ranged from $88 to $44,096. Individual recipients’ total awards ranged even more widely, from $250 to $285,688. For considerable detail on the bonuses, go here.

As you read about bonuses, you might recall other reports saying that 61% of IRS employees caught willfully violating the tax law aren’t fired, but may get promoted. You might find it even worse that Ms. Lois Lerner received $129,000 in bonuses. The former IRS official received $129,300 in bonuses between 2010 and 2013. As head of the IRS tax-exempt division at the heart of the targeting scandal, she received a 25% retention bonus each year—averaging $43,000 a year—on top of her regular salary.The IRS scandal broke in May 2013, but goes back to January 2010. The Supreme Court in Citizens United found it unconstitutional to ban free speech by corporations, unions and other organizations. Shortly thereafter, the IRS distributed a BOLO (Be on the Lookout) list for Tea Party organizations applying for tax exempt status. As the emails went awry, the fact that the IRS used instant messaging to hide internal communications was pooh-poohed by the administration.

Recently, the IRS says it “discovered” that Lois Lerner’s dog had an email account, in addition to her official account and personal email accounts. There was already an official IRS email account, and Lerner’s own private email account that the IRS had labeled ‘Lois Home.’ The ‘Toby Miles’ account? Toby is the dog, and Michael Miles is Ms. Lerner’s husband.

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October 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, September 30, 2015

The IRS Scandal, Day 874

IRS Logo 2Forbes:  Forget Lois Lerner, These IRS Agents Behaved REALLY Badly, by Robert W. Wood:

In any big organization, there are going to be mistakes, over-reaching, even some bad apples. As the media still debates how bad Lois Lerner was in the IRS targeting–while she received $129,000 in bonuses–there are other examples of bad IRS conduct. Alleged conduct anyway. For example, one IRS Agent in Seattle is facing criminal charges over an alleged scheme to extort cash from a medical marijuana dispensary for audit favors.

The Seattle Times reported that an IRS Agent named Paul Hurley, 42, attempted to squeeze tens of thousands of dollars out of a businessman for help with a delinquent tax bill. The IRS takes cases of misconduct seriously, for obvious reasons. Meanwhile, an IRS Agent in Tennessee has been charged with sexually assaulting a woman while performing an audit. Agent Samuel Garza was charged with sexual battery.

No matter how you spin it, these are further embarrassments for an agency that is still not over allegations of targeting and more. Even so, these alleged crimes may not be as colorful as the sex for lower taxes story spun by Vincent Burroughs. Vincent Burroughs claimed that his IRS auditor, Ms. Dora Abrahamson, flirted with him by phone and text, then sent him a selfie in her underwear.

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September 30, 2015 in IRS News, IRS Scandal | Permalink | Comments (0)

Tuesday, September 29, 2015

The IRS Scandal, Day 873

IRS Logo 2Conservative HQ, Lois Lerner's 'Partners' and Her ‘Mini-Me’:

Conservatives who now know about the lawless, arrogant ex-federal bureaucrat lawyer Lois Lerner may wish to know that her “farm team” meets at the Washington Marriott Georgetown October 5 – 7.

Last week I wrote at American Thinker about the little-known organization called NASCO, the National Association of State Charity Officials. NASCO consists of government bureaucrats who, like Lois Lerner, are supposed to be nonpartisan, but frequently are statist partisans who abuse government power. They operate between conservatives and the causes they support, and too many show contempt for -- even ignorance of -- constitutional rights and the rule of law over them.  ...

Professor Paul Caron, who deserves a medal for his daily spot about The IRS Scandal at his TaxProf Blog, focused on an observation about the bullying methods used by some members of NASCO. I’ll expand a bit with more from the American Thinker piece:

It’s not just that NASCO considered itself a partner with “Dr. Evil” Lois Lerner so much as many of its members act like her “Mini-Me.” Lerner’s IRS was caught violating First Amendment rights of conservatives by demanding such things as the prayers they said at their meetings, and illegally disclosing to hostile blogs the confidential list of donors to the National Organization of Marriage. 

It is a common unethical practice employed by many NASCO members to, like Lerner, make demands for actions and production of documents, but refusing to cite legal authority, which gives cover to their lawlessness or even incompetence.  For example, one assistant attorney general sent a “civil investigative demand” for documents. The investigation statute required that she state her “cause” in her demand, which provides a modicum of Fourth Amendment protection. When I asked her to cite her “cause,” she cited to the law requiring her to state her cause. I wrote back suggesting she watch a few episodes of Law & Order to learn the law. 

Minnesota Assistant Attorney General Elizabeth Kremenak provides another good example. Charity regulators have authority to investigate misdeeds, of course, but not authority to violate the First or Fourth Amendments. Not only does Kremenak tell charities what to do and what documents to produce, she adamantly refuses even when asked to provide notice of her legal authority for making such demands. Her lack of transparency is unethically designed to shield her violations of First and Fourth Amendment rights, and even her own investigations statute. 

Kremenak reports to Minnesota Attorney General Lori Swanson. After reaching a settlement in 2008 with a bank, which directed that a third of a six-figure fine go to the corrupt and now defunct “community organizing” group ACORN, Swanson received a grade of A+ from that group in time for her 2010 election. So, it’s not just censorship of political enemies; these regulators use their positions for payola and cronyism. 

Conservatives who have had dealings with Lois Lerner over the years, from when she was at the Federal Election Commission to her time at the IRS, need to know that there are hoards of NASCO bureaucrats such as Kremenak who act like Lerner’s ‘Mini-Me.’  

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September 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, September 28, 2015

The IRS Scandal, Day 872

IRS Logo 2RedState:  Is the IRS in Collusion with the Clinton Foundation? Charles Ortel’s Quest to Expose Clinton Foundation Fraud Has a Lois Lerner Connection, by Myra Adams:

Does anyone remember Henry Markopolos? In case you don’t, he was the former securities industry executive who for nine years persistently, but unsuccessfully, tried to convince the U.S Securities and Exchange Commission (SEC) that the respected securities investment firm headed by Bernie Madoff was engaged in massive long-term fraud.

Fast forward to 2009 when Madoff was sentenced to 150 years in prison for operating the largest private Ponzi scheme in history adding up to billions of dollars in client losses.

In 2010, Markopolos wrote about his dramatic whistle-blower experience in a book aptly titled,  “No One Would Listen: A True Financial Thriller.”

So why am I bringing up the heroic efforts of Harry Markopolos?

The answer is a whistle-blower in the mold of Markopolos has come to my attention and his name is Charles Ortel. Like Markopolos, Ortel has a background as a financial industry executive in addition to a successful track record of identifying economic trends and systemic problems within companies, most notably General Electric.

Throughout 2015, Ortel has carefully studied and documented a decade’s worth of domestic and global fraud, theft, corruption and violations of strict IRS rules being perpetrated by a prestigious multi-billion dollar charitable organization known as the Bill, Hillary, and Chelsea Clinton Foundation.

Unlike Markopolos, who went to the SEC and was largely ignored because of incompetence, Ortel believes that the IRS is actively in collusion with the Clinton Foundation.

Collusion with the high-profile charity explains why the IRS is not thoroughly investigating Ortel’s carefully documented allegations of illegal activity on a scale so grand that a major audit would certainly be triggered if the name of the foundation was not “Clinton.”

Only collusion explains why, for over a decade, the IRS has allowed the Clinton Foundation, and all its umbrella organizations with different names to operate outside the strict rules and regulations under which all tax-exempt charities must operate or risk losing their tax-exempt status.

Ortel calculates that 2004 was the year when the foundation began engaging in massive fraud. Now guess who was director of the IRS’s Exempt Organizations Rulings & Agreements Division at that time? And guess who in December of 2005 was promoted to director of the entire IRS Exempt Organizations Division? Does the name Lois Lerner ring a bell?

The now disgraced Ms. Lerner resigned and retired from the IRS in September of 2013. In May of 2014 she refused to testify before a congressional committee. She then invoked the 5th Amendment, and was found in contempt of Congress. Lerner became the name most associated with what is still an ongoing IRS investigation as to why and how her department consistently denied tax-exempt status to conservative groups.

Ortel told RedState that he believes Lerner, a known partisan Democrat, “looked the other way at the IRS, thus allowing the Clinton Foundation’s cancer to spread.”

But even with Lerner long gone, Ortel says “Clinton acolytes are spread throughout the IRS.” Certainly those allegations help answer the question I posed two weeks ago on National Review: “Where are the Clinton Foundation’s Revised IRS 990 Forms?”

Fortunately my piece caught Ortel’s eye and now, after many discussions, I realize that asking why the IRS has yet to crack down on the Clinton Foundation for their delayed 2014 Form 990 along with years of promised revised filings, barely scratches the surface.

With the IRS ignoring Ortel, he is seeking nationally known investigative journalists to help him gain some traction in the mainstream media for his politically charged allegations in hopes that the Clinton Foundation IRS corruption scandal will “go viral.” ...

Finally, the National Journal’s Ron Fournier added some fuel to Ortel’s fire. In a piece demanding that Hillary Clinton either “come clean or get out,” Fournier hearkens back to that famous phrase, “follow the money” attributed to “Deep Throat” in the Watergate scandal when he writes that a Clinton loyalist said to him, “The emails are a related but secondary scandal. Follow the foundation money.”

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September 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, September 27, 2015

The IRS Scandal, Day 871

Saturday, September 26, 2015

IRS Releases Summer 2015 SOI Bulletin

IRS Logo 2The IRS's Statistics of Income Division has released (IR-2015-105) the Summer 2015 SOI Bulletin (Vol. 35, No. 3), with these articles:

September 26, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 870

IRS Logo 2American Thinker, Lois Lerner's 'Partners':

On October 5, the same day the Supreme Court opens its term, across town at the Washington Marriott Georgetown a group of bureaucrats that has lost four times before that court will huddle in a three-day meeting open only one day to the public or the people and entities they regulate.

Unless you are a lawyer representing nonprofit organizations, it’s unlikely you’ve ever heard of NASCO, which is the National Association of State Charity Officials. These are state officials who work together and even collaborate with federal officials to regulate your favorite charities or nonprofit groups advocating for your constitutional rights.

A 2007 letter from NASCO’s then-president Hugh Jones to Lois Lerner describes NASCO as Lerner’s “partner in the regulation of charities.” Especially in retrospect, that’s some admission against interest, as lawyers might say. Lois Lerner, of course, is the now-former IRS official held in contempt of Congress for refusing to testify about how her Tax Exempt Division targeted and abused conservative nonprofit organizations, and illegally disclosed the names and addresses of donors to at least one. ...

It’s not just that NASCO considered itself a partner with “Dr. Evil” Lois Lerner so much as many of its members act like her “Mini-Me.” Lerner’s IRS was caught violating First Amendment rights of conservatives by demanding such things as the prayers they said at their meetings, and illegally disclosing to hostile blogs the confidential list of donors to the National Organization of Marriage.

It is a common unethical practice employed by many NASCO members to, like Lerner, make demands for actions and production of documents, but refusing to cite legal authority, which gives cover to their lawlessness or even incompetence. ...

The theme of NASCO’s meeting in Washington early next month is “A Renewed Focus on the State Regulator.” A renewed focus is indeed needed, but on their lawlessness, instransparency, unethical behavior, and Lois Lerner-like arrogance.

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September 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, September 25, 2015

The IRS Scandal, Day 869

IRS Logo 2The Hill:  The IRS's Abuse of Power, by Tom Schatz (President, Citizens Against Government Waste):

During the reign of King George III, Britain's American colonists felt the heavy burden of a monarch imposing his will to levy heavy taxes without representation, overregulate businesses and trample upon basic freedoms. In order to overcome these oppressive bonds, the 13 Colonies banded together to declare their independence from tyranny.

President Obama does not have the same level of power as King George, but he is using every tool at his disposal to emulate the king and restrict the freedom of Americans as they pursue their daily lives and conduct their business. In other words, when Obama famously said in January 2014 that he had a pen and a phone to get things done with or without Congress, he was not joking. His administration has taken unprecedented steps to issue regulations and rulings without going through normal administrative procedures, such as issuing "sub-regulatory guidance" and circumventing Congress whenever possible.

A prime example of this kind of abuse of power was the hiring of outside counsel by the Internal Revenue Service to conduct interviews and assist in an audit of Microsoft on May 19, 2014. In a May 13, 2015 press release regarding his letter to the IRS about this matter, Senate Finance Committee Chairman Orrin Hatch (R-Utah), questioned the legality of such an action because it "1) appears to violate federal law and the express will of the Congress; 2) removes taxpayer protections by allowing the performance of inherently governmental functions by private contractors; and 3) calls into question the IRS's use of its limited resources."

This extraordinary episode should be troubling for all taxpayers. On top of the waste of tax dollars, the hiring of outside litigators at Obama's IRS is the latest overreach by the administration and the same agency that spawned Lois Lerner, the former director of the Exempt Organizations unit.

While there is no excuse or justification for this action by the IRS and no one should be subject to such an misuse of the taxpayers' money, a large company can battle to maintain its rights under the law (albeit at the expense of conducting its ordinary business). It is bad enough when IRS auditors and bean counters come knocking at someone's door, but there is no way that a small business or individual taxpayer could withstand a grilling by high-powered and highly paid litigators. Congress was not around to stop King George, but it can and should stop the Obama administration's ongoing abuses of power.

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September 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, September 24, 2015

The IRS Scandal, Day 868

Wednesday, September 23, 2015

NY Times: IRS Ruling Makes After-Tax 401(k) Contributions More Attractive

IRS Logo 2New York Times, I.R.S. Ruling Makes After-Tax Contributions More Attractive:

Making pretax contributions to your 401(k) retirement plan is a no-brainer. But recent changes in federal tax rules may make it more attractive for serious savers to increase after-tax contributions, as well.

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September 23, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 867

IRS Logo 2The Hill, Hatch Wonders About IRS Discipline Over Political Scrutiny:

The Senate’s top tax writer asked Tuesday why the IRS has cleared most employees referred for potential improper political scrutiny since the agency’s Tea Party controversy erupted in 2013.

Finance Chairman Orrin Hatch (R-Utah) noted that Treasury’s inspector general for tax administration had referred 47 employees to the IRS in recent years for potentially breaking the rules for reviewing tax-exempt applications.

The inspector general sent those referrals when it thought an employee’s actions weren’t criminal, leaving any potential punishment up to the IRS.

But of those 47 referrals, the IRS found that 20 employees had done nothing wrong, and another five resigned during their investigations.

The IRS found another eight employees could face disciplinary action for future conduct, after the agency found “no clear” evidence of misconduct. Eleven referrals are still pending, while the rest of the 47 are protected by privacy laws.

In a Tuesday letter, Hatch asked for more details about how the IRS investigates those referrals and about any role the National Treasury Employees Union plays in those inquiries.

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September 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, September 22, 2015

The IRS Scandal, Day 866

IRS Logo 2USA Today op-ed:  Why Congress Should Impeach Gina McCarthy, John Koskinen, and Other Obama Administration Obstructers-of-Justice, by Glenn Reynolds (Tennessee):

Is impeachment the only solution for lack of executive accountability? ...

Congress is considering impeaching [EPA Administrator] Gina McCarthy, ... Rep. Paul Gosar (R-Ariz.) has introduced a resolution of impeachment against her because he says she lied during testimony about the EPA’s new clean water rules. ... McCarthy is accused of perjuring herself three times, in discussing the scientific and engineering basis for those rules. So, you might wonder, why not just prosecute her for perjury?

The problem is that criminal prosecutions are brought by the executive branch, and there’s not much chance that Obama administration Attorney General Loretta Lynch will bring a perjury prosecution against a fellow member of the administration. And there’s nothing Congress can do to change that. ...

The framers of the Constitution knew that, of course, which is why they gave Congress another power, that of impeachment. ...

Congress has had a lot of trouble with this administration. The IRS stonewalled on the emails implicating Lois Lerner in political targeting of Tea Party groups, the State Department (and Hillary Clinton personally) have stonewalled and foot-dragged on releasing Hillary’s emails, and other officials, such as Director of National Intelligence James Clapper, have provided “clearly erroneous” statements to Congress and suffered no penalty.

Traditionally, presidents have been willing to sacrifice underlings caught in this sort of behavior, but the Obama administration hasn’t been so quick to force them out. And like any behavior, lying to Congress and stonewalling congressional oversight becomes more common when it becomes clear that there will be no significant price to be paid.

Impeaching lower level officials may be a solution. Not only is the threat of removal from office a significant one, but most cabinet officials — and even many lower-level appointees — have bigger ambitions. Rendering them ineligible for further federal office is a genuine threat.

That’s why impeaching McCarthy — and, as some, including Ed Morrissey, have already suggested, IRS chief John Koskinen, whose stonewalling over the IRS political-targeting scandal has been egregious, or Clapper — might encourage better behavior in the future. The Republican House majority leader says it won't happen, but as Congressional Republicans seek a way to hold the Obama administration accountable, the pressure to do something may change that political calculus.

We live in a world where these officials pay no price, and where no one lost their job over the EPA’s disastrous Colorado mine spill, and where the Veterans Administration is in many cases firing whistleblowers before accountable officials for botched veteran care.

Is impeachment the answer to lack of accountability in the executive branch? If it isn’t, what is?

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September 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, September 21, 2015

The IRS Scandal, Day 865

IRS Logo 2Providence Journal op-ed, Selective Interest in Enforcing the Law, by Rick Manning (President, Americans for Limited Government):

Who said this? “I would just say on principle that the success of our democracy depends on rule of law. And there is no public official that is above the law, certainly not the president of the United States. But neither is the Rowan County clerk. That’s a principle that is enshrined in our Constitution and in our democracy and it's one obviously the courts are seeking to uphold. ”

That was White House Press Secretary Josh Earnest speaking on Sept. 3 about the arrest of Rowan County Clerk Kim Davis of Kentucky for refusing to process gay-marriage licenses.

The rule of law is fundamental to our nation’s existence, and it has been virtually destroyed over the past seven years both by the Obama administration and federal courts with acquiescence from the congressional leadership.

The president’s Internal Revenue Service engaged in political targeting of conservative groups and auditing conservative donors in one of the most dangerous abuses of executive branch power in our nation’s history, and the perpetrator faces no federal charges and continues to draw payments from the federal government. Lois Lerner has been, and continues to be, above the law.

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September 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Sunday, September 20, 2015

The IRS Scandal, Day 864

IRS Logo 2CNN, IRS scandal Fast Facts:

Here’s some background information about the Internal Revenue Service (IRS) scandal involving the targeting of certain groups. In May 2013, the Treasury Inspector General for Tax Administration released a report indicating the targeting involved delaying the processing of applications by certain conservative groups and requesting information from them that was later deemed unnecessary.

The Justice Department is investigating circumstances surrounding the disappearance of IRS emails that Republicans believe could shed light on the possible targeting of conservative and other political groups by the agency.

Other Facts: The investigation into the email disappearance, which the IRS said was due to a crash of former IRS official Lois Lerner’s hard drive, is part of a wider criminal probe of whether any IRS employees broke the law in unfairly singling out specific political groups for extra scrutiny.

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September 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, September 19, 2015

The IRS Scandal, Day 863

IRS Logo 2American Thinker, Uh-oh: Hillary's Server Data May be Recoverable:

Hard though it is to believe, maybe all that feigning of ignorance (”You mean like with a cloth?”) about wiping a server was genuine. Three writers from the Washington Post (Rosalind S. Helderman, Tom Hamburger, and Carol D. Leonig) burrow into the question of what actually was done to the famous server data, and come up with the possibility that the data was not expertly “wiped” by overwriting it multiple times with nonsense characters. ...

How did the original server get to be blank? If Platte River Networks didn’t wipe it, then theoretically that data should be recoverable. And it appears Pagliano had no access to it after the data was migrated, only to the second server.

Either a mysterious “sinister force” (a phrase from Watergate - Google it) destroyed the data on the original server, or it should be fully recoverable despite being “blank.” Unlike Lois Lerner’s hard drive, apparently nobody came in with a hammer and physically destroyed it.

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September 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, September 18, 2015

The IRS Scandal, Day 862

IRS Logo 2Robert W. Wood (Forbes), IRS 'Tax Protester' Label Is Harder To Delete Than Lois Lerner Emails:

In 1998, Congress passed a law prohibiting the IRS from labeling people as “illegal tax protesters.” In fact, Congress ordered the IRS to purge the “protester” code from its computer files on 57,000 Americans. Every year, the Treasury Department’s Inspector General reviews how well the IRS is doing at purging the protester label. It turns out the protester epithet is hard to entirely eliminate, even after all these years. The 2015 audit report says a few people at the IRS still do it.

Using illegal tax protester or other similar designations may stigmatize taxpayers and may cause the IRS to be biased against them in future contacts. Congress enacted the prohibition against illegal tax protester designations because it was concerned that some taxpayers were being permanently labeled that way even though they later fixed their tax problems or stopped doing things the IRS thought were unreasonably against the tax system.

Mostly, the IRS is careful about these hot button words now. The report says of approximately 4.8 million records and cases, there were only four instances in which IRS employees referred to taxpayers as “Tax Protester,” “Constitutionally Challenged,” or other similar designations in case narratives in the Appeals Centralized Database System.

The Inspector General recommended that the Chief, Appeals, emphasize to all Appeals employees the importance of reinforcing that taxpayers are not to be referred to as Illegal Tax Protesters or any other similar designations. In a response to the report, the IRS management agreed. Of course, there are plenty of negative things you can be called in the tax world–for example “aggressive” or “delinquent”–one of the worst to be called is “frivolous.” In IRS lingo it’s about as bad as you can get, just shy of the other “f” word, “fraudulent.”

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September 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, September 17, 2015

The IRS Scandal, Day 861

IRS Logo 2Real Clear Politics, Descent Into Lawlessness, by Victor Davis Hanson (Stanford):

In the eight-plus since the [Scooter] Libby trial, the Obama administration has blown up the law as we have known it for centuries. ...

Just as scary is the application of the law on the basis of the perceived politics of a suspect.

IRS bureaucrat Lois Lerner was exposed as a rank partisan whose office gave particular scrutiny to would-be tax-exempt groups deemed opponents of Obama's re-election efforts. She invoked the Fifth Amendment and refused to testify before a congressional committee about her actions at the IRS. Lerner has never been indicted.

Almost everything former Secretary of State Hillary Clinton has stated about her improper use of a private email account and server has been proven false. A State Department staffer who worked on Clinton's private server plans to invoke the Fifth Amendment to avoid testifying before a congressional committee about his role in privatizing Clinton's email.

But like Lerner, Clinton has escaped an indictment or jailing.

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September 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, September 16, 2015

WSJ: IRS Raises Red Flag On Real Estate Spinoffs

Spinoff 2Wall Street Journal, IRS Raises Red Flag on Real-Estate Spinoffs:

Activist investors have been clamoring for companies to spin off real estate and unlock the value hidden in their headquarters, stores and land. This week, U.S. tax authorities weighed in with a message of their own: Not so fast.

In new guidance [Notice 2015-59], the IRS signaled its discomfort with a range of corporate spinoffs, specifically calling out deals in which companies split their real estate and other physical assets from their mainstream operations. The agency said it was concerned that some of these transactions may violate rules meant to ensure that companies don’t disguise dividends and other taxable transactions as spinoffs to avoid paying taxes.

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September 16, 2015 in IRS News, Tax | Permalink | Comments (0)

Tuesday, September 15, 2015

The IRS Scandal, Day 859

IRS Logo 2Forbes: IRS Gets Sued Over Bonuses To Lois Lerner, by Robert W. Wood:

For more than two years, the IRS targeting scandal has been one dissembling excuse after another. Rogue employees in Cincinnati! Oops, the emails are gone! Lois won’t testify! We can’t be expected to perform with the IRS budget being slashed! IRS can’t hand over anything without violating taxpayer confidentiality. Lois’s dog did it! This was a spontaneous demonstration to a video!

You name it, we’ve heard it. So I was delighted to read that the mysterious IRS bonuses are the subject of a FOIA suit. On June 20, 2013, weeks after the targeting story broke from Lois Lerner herself (before she took the Fifth), the IRS paid out $70 million in bonuses. Ms. Lerner received $42,000, part of her $129,300 in bonuses. Former Commissioner Miller (!) received $100,000. If anyone can get to the bottom of the CIA-like IRS, it is Tax Analysts, which has a long tradition of suing the agency. 

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September 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Sunday, September 13, 2015

The IRS Scandal, Day 857